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The Cable TV bill showed up today with the annual price increase. (Actually, I don’t have Cable TV. I only purchase internet service, and the CATV provider is also the internet provider.) I’m sure many of you know, but in case you didn’t, these companies typically offer a 12-month introductory price for new customers. Then, after 12 months, they automatically increase the price. In my case, it’s a fairly significant 33% increase!

The Dance

With several of these companies, you can call them up and ask for a price reduction. Years ago, all you had to do was to take 2 minutes out of your life to call them, nicely ask for the reduction, and they happily gave it to you instantly. Over the years, it has become more and more difficult to do so. It has become a dance, sort of a tango, to go back and forth with them, trying to convince them to retain you as a customer. These companies know that it’s easier (and cheaper) to retain a customer than it is to lose them and try to win them back later.

Thinking it’s easier to catch flies with honey than vinegar, I put a big smile on my face and called up my CATV (internet) company. Figuring that these people are only doing their job, there’s no point in being mean or demanding of them. When the agent answered and asked me what she can do to help, I replied, “I’m calling to help you retain me as your customer.” I explained that I liked their service, that I don’t need any more or any less features, and that I just wanted to pay the price that I used to. She replied with the standard, “Let me see what I can do for you.” She put me on hold (more of the game), came back and said, “I’m sorry, but the only thing I can do for you is actually more expensive than your new price.” I said that wasn’t what I was hoping to hear, and asked to talk to the “customer retention department”.

Stepping up the Game

What I didn’t expect with this call was what came next. She explained that things aren’t like they used to be. They used to be able to renew those introductory low prices, but they can’t anymore. Speaking with her manager wouldn’t do any good. I explained that I was leaving the country on travel for 2.5 weeks, and that I’d even quit being a customer. I’d do that, because after 1 month, I could re-join as a new customer at the new customer introductory prices. Here I was, saying I was going to quit their service, and she wasn’t willing to budge on price.

She continued to say that times are tough, and she and all of the agents are getting judged on customer satisfaction surveys, and it’s in her best interest to keep me happy. She even went on to say that she could lose her job if people like me aren’t satisfied. With a smile on my face (so she could hear me being nice and polite), I again asked to speak to the retention department. She was actually getting a little livid at this point, saying that they can’t do anything for me, and that I shouldn’t be so upset with her. I explained that I understand that this was just a little dance that we have to do and I didn’t blame her. She again insisted that this wasn’t the case, and this is all the company can do for me, but if I really wanted to talk to her manager, she would connect me. I said, “Yes, please.”

After I was connected to her manager, I again explained that I just wanted to give them an opportunity to retain me as a customer by keeping my price the same as it was before. He said he would check, and put me on hold. A few seconds later and he said that they could do it (contrary to what the first person said they absolutely couldn’t do anymore). It’s all a big scam. A big sob story to get the weak-willed people to give up and just keep paying 33% more.

I’m glad to be back at the original new customer “introductory” price for another 12 months. Don’t be afraid to call and (nicely) ask to have your rates reduced, and don’t let them fool you that they can’t do that for you.

It’s that time of year when employers tell us about how medical coverage has changed (been reduced) for next year, what the premiums are (been increased), and ask you which one you want to be stuck with for the year. I don’t know about you, but it’s a tough decision for me. You can’t change your mind mid-year, should some new sickness ail you, or heaven forbid, you get into an accident. My daughter and I are pretty healthy, but I’m getting to the point where I should probably see a doctor more often. I don’t even always go get my 100% covered (free) annual physical.

It seems like, at the companies that I’ve worked for, that the 3 healthcare choices you get are fairly similar coverage (80% covered, after meeting the deductible), but with different deductibles and therefore different monthly premiums. So if coverage is nearly the same, how does one determine which plan to go with? Of course, it depends upon the relative health of you and your family members, how often you normally see a doctor, and if you expect that to change within the next year. Something to also consider is what your maximum out of pocket expense might be if something catastrophic was to happen, such as an automobile accident, heart attack, or serious injury from skydiving, rock climbing or your favorite adrenaline activity. While you can’t plan for that to occur or not occur, you don’t want to be left with an outrageous medical bill if that was to happen.

Graphing your options

For years, I’ve created my own spreadsheet from scratch to compare the plans and graph the results. I plot how much it will cost me from my pocket for various medical expenses incurred through the year. The costs includes the per-paycheck premium, the 100% cost up to the deductible, the 20% co-pay up to the out of pocket maximum, and the out of pocket maximum itself. The graph illustrates how much it costs me if I’m perfectly healthy, visit a doctor for some minor things, regularly see a doctor, or have a major medical issue such as a lengthy hospital stay. Because there are usually different deductibles for an individual versus the entire family, there are graphs for each case.

An example is below. By looking at this graph, it’s easy to see that Plan C is the lowest cost, regardless of how many times you see the doctor. This is true if the coverage is the same, meaning you can see the same doctors, the hospital bills would be identical, and only the premiums, deductibles and max out of pocket amounts are different. Whether you never saw a doctor for the year, had $5000 of medical services, or had $35,000 of medical services, Plan C’s total cost (Premiums, Deductibles, and Co-Pays) are lower in all cases.

This is an easy decision for Plan C

It isn’t always that easy. Here’s my actual situation, and if only one family member receives medical care through the year. In many medical plans, the individual deductible is half of the family deductible, but in this case, Plan C has a large deductible that’s the same for a single family member or the entire family. The large deductible must be met before the plan starts paying out anything. In this case, Plan C deductible is $4000. If I incur somewhere between $2500 and $19000 of medical bills, Plan C is no longer the least expensive choice. In fact, it’s about $1000 more expensive than Plan B. Unless the bill is over $20,000, then Plan C is the cheapest, in this case due to the lower max out of pocket limit.

No clear low-cost winner here

Enter the HSA Savings

But…what’s not included above is the fact that Plan C is actually a High-Deductible Health Plan (HDHP). From Wikipedia: “A high-deductible health plan (HDHP) is a health insurance plan with lower premiums and higher deductibles than a traditional health plan. Being covered by an HDHP is also a requirement for having a health savings account.” That health savings account (HSA) is a beautiful thing where you can save PRE-TAX dollars, and later use that money to pay for qualified medical expenses, including your deductible and co-pays, as well as other things like dental, vision and prescriptions. For many people, this means 15, 25% or 28% savings on Federal taxes, as well as State taxes, which is 6% here where I live. That’s a 31% savings in my case. Now, factoring the HSA savings into the equation, the graph looks like this:

Now once again, the choice is easy. No matter what my medical expenses are, the Plan C (HDHP) with HSA tax advantage is the lowest cost choice.

After I went through this exercise, a friend found this website that does all the graphing for you. Just add in the pertinent information for your plans. If you don’t plan on going out of network, you don’t need to fill in those figures. It doesn’t figure out your tax advantage for an HSA, but the rest it does very well.

From health-plan-compare.com, they look the same!

Hopefully you can use this information to help you with your next healthcare plan election, minimizing your cash outflow regardless of how much medical services you expect, or don’t expect, to be billed next year.

Well, that was quite the “vacation”. Actually, I wouldn’t call it a vacation. I’d call it an adventure. My typical vacation usually consists of going to some island and generally relaxing. I’ll sleep until I feel like getting up, maybe take in a few tourist sites, definitely a lot of beach time, and go to sleep whenever. This vacation was quite different.

The official route was about 1500 miles, driving about 200-300 miles per day. Getting to/from the starting and stopping points is up to you and was another 1500 miles in my case. The standard routine is: you get up in the morning, drive 200-300 miles, attend a car show in the next town, have dinner, check out the cars in your hotel parking lot, get some sleep, and repeat. Sounds pretty simple, and pretty interesting to be in a new town every day.

GTO: New versus Old

Starting with the first evening, my buddy and I got into a late-night wrenching session (more work on the car). Even though I sunk over $4000 preparing the car for the 3000 mile trip, Continue Reading →

There are a couple reasons why I choose to be relatively frugal. One of them is that I like to skimp in areas such that I can spend in others. After all, there’s only a finite money supply coming into my pockets, so I choose to spend it wisely. And one of the best ways to spend wisely is to value experiences over material possessions. For me, and I’m thinking a lot of others, travel is one such way to enjoy new experiences. Memories (and photos) of a trip last far longer than that new cellphone or gadget.

Power Tour

I have spent a lot of time (and unfortunately, money) preparing for an upcoming trip. Most of my past trips involved an airplane ride to some far away destination, usually outside of the USA. This trip is a little different. It’s a good old-fashioned road trip. And it’s a road trip like no other. It’s the Hot Rod Magazine Power Tour. It’s packed with approximately 3000 cars that travel from town to town over the course of a week. Seven cities in seven days, covering over 1500 miles. As you can see in the first picture, it’s quite a parade! There’s a lot of new cars, old cars, hot rods, big loud roaring engines, burn outs and very unique cars! And they trigger old memories of a car once owned. A snapshot of their previous life: Illegal street racing, going to the (real) drive-through, sneaking friends in the gigantic trunk into the drive-in theater, first dates, shenanigans in the back seat, or previous road trips taken.

One thing that’s nice about the Power Tour is that they try to avoid using interstates and drive a lot of the state highways and local roads. It’s a great way to see Americana, which you don’t get to see whizzing by at 75 MPH on the interstates. It’s something I love doing whenever I do a road trip. Take a new path to get to a frequent destination. Stop by some mom and pop store or awesome homemade cooking restaurant.

You get to slow down and enjoy the view. And the locals enjoy the business, the temporary excitement in town, and maybe even a new friendship.

My Memories

As I mentioned, I’ve been quite busy lately trying to get my car ready. After all, I’m a little concerned about it’s road-worthiness, as it’s nearly 50 years old. And it’s been 24 years since it was restored. You see, this trip isn’t all about what lies ahead. It’s also about remembering the past memories. My father and I bought this car 24 years ago, and restored it together. It’s what my dad and I did together. We worked on cars. We went to car shows. He’d relive his past and tell me stories. It was the together time that I cherished, as he didn’t have much time while working a full-time job plus a part-time job trying to provide for his family. But we worked on cars. We worked on his cars. And when I got old enough, we worked on my cars. But our last car together has sat nearly silent for the last seven years, when he passed away. I would still visit once a year and take it to the Midwest’s largest car show, the Iola Old Car Show. But it’s not right to have this memory (car) sit 363 days a year and only drive it 30 miles, only to sit another 363 days to be awoken again. So last summer I bought it to its new home…my home. And I got this crazy idea to go on the Hot Rod Power Tour.

What was I thinking? This was nearly 3000 miles! In the last 7 years, the car has only seen around 300 miles total! In the last 24 years, the car has only seen 6000 miles. And I want to put on 3000 in a week? I couldn’t help but think that dad might roll over in his grave. But then, maybe he’d be proud that I’d be out enjoying the car, showing it to others to enjoy, and not rotting away hidden in a garage. Maybe it’s a great way to relive some of my memories with my dad. Maybe dad would “ride along” with me and enjoy it too?

It’s not an inexpensive trip. Getting the car ready, just doing some maintenance and replacing some old parts (like 24 year old tires!) cost $4000. (That’s a fraction of what the car is worth, so it’s not a ton in the big picture…not like sinking $2000 of repairs into a car that’s only worth $2500 when fixed.) The trip itself won’t be cheap either. 3000 miles at around 12 MPG and it has to burn premium fuel is about $800 in gasoline, plus 7 nights in hotels (mostly budget hotels….Super 8, except one night on crazy Beale St. in Memphis) and 7 days of dining out. This trip will be more expensive than most of my international trips!

I know that a frugal lifestyle shuns car ownership due to the costs. I still like to think that being frugal allows us to be able to spend money wisely elsewhere. This car, this hobby, and this road trip is one of those places I choose to spend wisely. It’s a way for me to keep my father’s memory alive, and to make new memories of my own. How do you assign value to that? One more thing. This isn’t the typical car where you lose nearly 20% of it’s value just by driving it off the dealer’s lot, or losing nearly 90% of it’s value in 10 years or less. Since we’ve owned this car, it has tripled in value. So while there is some maintenance, storage and insurance costs, one could consider it an investment. As such, I’ve actually included it’s value in my net worth, because it’s a fairly large number.

Here’s a picture of my(our) car… a 1966 Pontiac GTO Convertible, with the original 389 c.i. engine. Vrooom.

Since it is important to set goals, I thought I would proclaim mine here, so you understand where I’m coming from and where I’m trying to go. Unfortunately, I am not yet at the start of my 5 year plan, but I’m getting closer every day. While I previously didn’t do any calculations to determine the feasibility of my goal, I wanted to retire early. From a fairly young age, I arbitrarily picked (guessed) age 50. I know that’s not extremely early, but it’s far earlier than most colleagues retiring around age 62 with reduced Social Security benefits or age 66 with full benefits. And it’s far younger than any one I personally know…until I found out former co-worker Jeremy from GoCurryCracker retired at age 38.

Goal Reset

Somewhat recently, I had to completely reset all of my plans. Just about 2.5 years ago, I had a very large set-back to my plans. Continue Reading →

In the words of the Twisted Sister video I Wanna Rock, “What do you want to do with the rest of your life?” That’s an excellent question. We hear it throughout our lives. We are asked as little kids, “What do you want to do when you grow up?” We are asked in a job interview, “What do you see yourself doing in 5 years?” It’s good to have goals. Without goals and something to aspire to, how do know what to do to get there? While it’s good not to have every minute of your life planned out, I don’t think it’s good to live life completely aimlessly either. Of course goals can be specific, but they do not need to be. The further out, the more generic they can be. As time passes, you can refine your goals. As you do more research, you can refine you goals. And of course, just like a kid who’s asked what they want to do when they grow up, even adults are allowed to change their minds.

I have a goal of early retirement. That is my goal. Knowing that this is my goal, it means I need to work towards financial independence. I want to be FIRE. Financially Independent, Retired Early. Continue Reading →